Michigan road funding: Proposal calls for higher fees on electric, hybrid vehicles

House Republicans working to answer Gov. Rick Snyder's billion dollar road funding question are considering a new part of the equation: Increased registration fees for electric and hybrid vehicles.

The 2012 Ford Focus ElectricFile Photo 

LANSING, MI -- House Republicans working to answer Gov. Rick Snyder's billion dollar road funding question are considering a new part of the equation: Increased registration fees for electric and hybrid vehicles.

House Bill 4608, introduced Tuesday by Rep. Mike Shirkey, R-Clarklake, would boost annual fees by $75 for electric or alternative-fuel vehicles that weigh less than 8,000 pounds and $200 for heavier models.

Owners of those vehicles aren't paying their fair share to maintain Michigan roads they drive on, Shirkey told MLive, because they are able to avoid at-pump fuel taxes that the state uses, along with registration fees, to fund construction and repairs.

"This begins the conversation about how to compensate for their non-contribution," Shirkey said. "This is not intended to be a long-term solution for road funding, but it begins to address some of the unfairness issues."

The bill, which also includes reduced fees for vehicles 10 years or older, is unlikely to generate huge profits for the state but will "level the playing field," according to Shirkey. A separate bill he previously introduced would increase registration fees that public transportation agencies pay on buses. "Whether you use mass transit or not, it's another subsidy that all taxpayers cover," he said.

Shirkey's proposals could be folded into a developing road funding package introduced by state Rep. Wayne Schmidt, R-Traverse city, that calls for increased fuel taxes at the wholesale level coupled with at-pump exemption from the state's 6 percent sales tax. The sales tax exemption would leave a hole in funding for K-12 education and municipal revenue sharing, prompting additional discussions about replacement revenue.

Schmidt, who chairs the House Transportation Committee and plans to hear testimony on several registration-related bills next week, said that both increased fuel taxes and registration fees will need to be part of any viable solution.

"There are people who are going to say that we're funding this on the backs of electric vehicle owners, but that's not what we're talking about," Schmidt told MLive when asked about Shirkey's bill. "This is about making it equitable. They use the roads too and need to help pay for repairs."

The Michigan Department of Transportation says fuel tax revenue has been steadily declining in recent years as more motorists buy electric or otherwise fuel-efficient vehicles, a problem that the federal government and other states are also dealing with.

Washington and Virginia have reportedly instituted higher registration fees for electric or hybrid vehicles. A couple of states have begun to explore a miles-driven tax, but the technology is new and raises a number of privacy concerns.

Electric and hybrid owners protested Virginia's $100 fee proposal, which was part of a large transportation fund package signed by Republican Gov. Bob McConnell, calling it a "tax on virtue" and arguing that they were being penalized for "doing the right thing" by purchasing a green vehicle.

Shirkey, who opposes federal subsidies for electric vehicles but is a fan of the technology, does not believe that increased registration fees will discourage widespread adoption in Michigan. "I don't think it's a disincentive at all," he said. "I think people will look at it and say it's fair. That's fair."

The governor's executive budget proposal, as released in February, anticipated $1.2 billion in new road funding to be generated through a combination of higher gas taxes and vehicle registration fees. The plan hit a series of early speed bumps, but lawmakers continue to debate various alternatives in hopes of including new funding in the budget they plan to send the governor by early June.

House and the Senate appropriations committees have both approved transportation budgets without the proposed revenue increase. But Snyder, who is meeting with top Republicans and Democrats in hopes of finding common ground, said Tuesday that discussions are "ongoing" and will continue as the budget process moves forward.